Understanding Your Insurance Deductible
Flat dollar deductibles
A flat deductible is a fixed amount like $1,000, $2,500, or $5,000. You pay this amount first, and your insurance covers the rest up to your policy limits. For example, if your repair costs $25,000 and your deductible is $2,500, the insurance pays $22,500.
Higher deductibles lower your annual premium but increase your out-of-pocket cost when you file a claim. Choose a deductible you can comfortably afford in an emergency.
Percentage deductibles
Some policies, especially in coastal or storm-prone areas, use percentage deductibles for wind, hail, or hurricane damage. This is calculated as a percentage of your dwelling coverage, not the claim amount. A 2% deductible on a $400,000 dwelling policy means an $8,000 deductible.
A 5% deductible on the same policy is $20,000. Many homeowners do not realize how large their percentage deductible is until they file a claim.
Multiple deductibles on one policy
Your policy may have different deductibles for different types of damage. A common setup is a $2,500 flat deductible for most claims plus a separate 2% wind or hurricane deductible. If a hurricane damages your roof (wind) and a pipe bursts from the disruption (water), you might face two separate deductibles on the same event.
Read your declarations pageHow to Read Your Insurance Declarations PageYour insurance declarations page is a one or two page summary that contains the most important details of your policy. Knowing how to read it befor...
Read more → carefully to understand all the deductibles that apply.
When is your deductible applied?
Your deductible is subtracted from the first payment on your claim. If your RCV estimate is $30,000 and your deductible is $2,500, the ACV payment you receive will have the deductible already subtracted. You do not write a separate check to the insurance company.
The deductible is simply the portion of the loss that you absorb. If the total damage is less than your deductible, there is no insurance payment at all.
What to do
Review your declarations page and identify all deductibles that apply to your policy. Know both your standard deductible and any named-storm, wind, or hurricane deductible. If you have a percentage deductible, calculate the actual dollar amount based on your dwelling coverage so you are not surprised.
Consider whether a higher deductible to save on premiums is worth the financial risk. If you are filing a claim, factor the deductible into your decision.
See how this applies to your property
Upload photos of your damage and get a detailed analysis showing exactly where your estimate may fall short.